Dubai Metals and Commodities Centre (DMCC), Multi Commodity Exchange of India Ltd. (MCX) and Financial Technologies (India) Limited (FTIL) on Tuesday announced the creation of the Dubai Gold and Commodity Exchange (DGCX), a new exchange, developed to facilitate the trade of gold and commodities.

The size of investment into the new venture, where DMCC has 50 per cent share, FTIL maintains 40 per cent stake and MCX has 10 per cent, was not reported, although it was said to be “significant”.

Subject to getting the needed regulatory approvals, the exchange will start operations in the second half of 2005 and Dubai Financial Services Authority is expected to act as a regulatory body for the exchange.

Tuesday's announcement followed the signing of an official memorandum of understanding between the DMCC, MCX and FTIL to join hands for the formation of Dubai’s newest exchange.

DGCX will be a global exchange with US dollars denominated contracts. According to Khaleej Times, after the establishment of the gold exchange, in a nine to 12 months period from now, the partners will start working on steel exchange, followed by other contracts.

DMCC’s executive director for the Gold and Precious Metals sector, Colin Griffith, said: “Appropriately for the ‘City of Gold’ the first contract listed on the exchange will be gold, but that will be quickly followed by other contracts." (albawaba.com)